Women on boards debate: Banking crisis ‘helped women stake place in the boardroom’

The banking meltdown advanced the cause of women in business because it forced bosses to appreciate they need “fewer Bob Diamonds” and more voices challenging “macho culture”, said a leading City fund manager.

Speaking at a debate on women in the boardroom, sponsored by the Evening Standard, Helena Morrissey, chief executive of Newton Investment, said: “We have travelled a huge way and the real driver is the financial crisis.”

The mother of nine was sharing a panel with barrister and part-time judge Cherie Booth QC; Jasmine Whitbread, boss of Save the Children International; BBC chief operating officer Caroline Thomson and Financial Times columnist Lucy Kellaway.

Ms Morrissey claimed that the credit crunch which brought the global financial system to its knees may not have been so severe if there had been “more women at the top and on trading floors and in M&A [mergers and acquisitions]”.

She said the crisis had made company leaders realise that having “different types of people making decisions, challenging each other and creating the right culture” could help avoid such catastrophes in future.

When Royal Bank of Scotland almost collapsed and had to be bailed out, 17 out of 18 board members were male and many were part of a tight-knit “Edinburgh mafia”, she added.

But the debate, at Google’s offices in Central St Giles, revealed splits over whether there should be legally binding quotas to boost female representation in the boardroom. Ms Booth insisted the “glass ceiling” was still intact and urged people to “stop being defensive” about quotas: “If anyone in this room thinks everything is alright for women in the UK, I’m afraid they are sadly misguided. I don’t want to be depressing about this because there has been huge progress, but still there is a persistent gender pay gap, we still have the glass ceiling. We are under-represented in law, in politics and in business.”

She said she would prefer not to resort to legally binding quotas, but they might be unavoidable: “Let’s be honest. We have been waiting a long time for this … How much longer are we going to have to talk about this before we make a change?” She disagreed that quotas were discriminatory, but were “about increasing the pool of talent and making sure that talent rises to the top”.

Ms Booth claimed that many “mediocre” men went a long way, but responding to the suggestion that Alpha women needed Beta men to support them, the wife of former premier Tony Blair joked: “Who is Beta in our house?”

She added: “There are times in your career when you are both aspiring to be Alphas when one or the other of you is going to have to take a back seat, but that doesn’t mean you have to take a back seat forever.”

‘We’re still fighting deep-rooted stereotypes’

Lucy Kellaway, Financial Times Columnist

The majority of board members are non-executives. It is an important role but irrelevant compared with what happens at executive level. To get women executives coming through your ranks is really, really hard. My fear is that by concentrating on the easy-peasy bit we are neglecting the difficult bit that matters. Alpha women needing Beta men… of all the extraordinary women in the world, almost all had husbands who were not extraordinary at all.

Cherie Booth QC

Who is Beta in our house? There are times in your career when you are both aspiring to be Alphas when one or the other is going to have to take a back seat, but that doesn’t mean you have to take a back seat forever.

I still think women need to do more about their confidence. Often we are more apologetic for our talents, however great they may be, whereas men tend to be proud of their fairly limited talents. It is often the women who take the career break at a time when the men are putting their foot down on the accelerator.

Jasmine Whitbread, Chief executive, Save the Children International

We now expect there to be women Olympians and they are also making their way onto the governance side.We have to … make the most of the momentum. We need to keep talking about it until it becomes a non-issue.

There are fewer women at the top table, even though, typically, women do very well in the early stages of their careers. We are living with very deep-rooted gender stereotypes. We kid ourselves if we don’t think that.

Caroline Thomson, BBC Chief Operating Officer

There is a profound issue about how you get more women on boards and it is about changing the culture. You can’t think that by having targets, succession plans and training plans that you have somehow fixed it, that you can sit back and relax.

We just need to keep sensitive and keep the measures in place … You are quite vulnerable at the top to one or two big shifts of people. We need to recognise there is a long-term culture change needed. We need to keep our eye on the ball.

Helena Morrissey, CEO of Newton Investment

Many companies are quite determined to make changes. When I talk to the same chairmen who initially turned me down… many of those people are now saying we are seeing the difference having more women has made to our board culture.

The Davis Review put the onus on us all to do something rather than just legislating. Substituting one form of discrimination with another is not the right way. We have got to change the dynamic. It has to be men and women working together. Companies have to play their part.
Your Say

Julia Stafford, who runs Wine Pantry and quit her job in the City after hitting the glass ceiling, said: “A lot of people are put off training women because they think they are going to go off and have children. We should take on that responsibility and start to train other women.”

Josie Rourke, Donmar Warehouse artistic director, wished the debate had gone on longer: “If we could have carried on until 2am we would have heard extraordinary things.”

Author Kate Mosse said: “There was a range of opinion, which meant there was potential to go away and think about things.”

Tamara Rojo, artistic director of the English National Ballet, said she could relate to Lucy Kellaway’s comment about not using “extraordinary” to describe successful women. “It should be so ordinary. We confront these issues every day in our lives.”

Professor Lisa Jardine however, said the debate had been full of the “classic codswallop” that often emerges at debates about women at the top. She added: “The room was full of people who can, who are and who will, but all we were getting was whinge, whinge, whinge about why we can’t do this.”

When Elisabeth Grieg, one of Norway’s most powerful business-women, stood up to address 150 of her male peers in 2002, she took many by surprise.
The formidable blonde shipping magnate was at a conference that had just been told the government was bringing in a 40 per cent quota for women on company
boards. The ultimate sanction for failing to comply within two years was to be effectively shut down.

One attendee described how there was a collective intake of breath as the executives realised that what was previously talked of only as an aspiration had suddenly become a very hard reality. “There were predictions that the Norwegian economy would slump, international companies would all leave the Oslo stock exchange and that it would harm the whole national economy. This was from men and women equally,” says Marit Hoel of Norway’s Centre for Corporate Diversity.

But Grieg, then in her early forties, stood up. “When I came into the room I was absolutely determined I was against this idea of quotas,” she told them. “But after listening to this discussion and how people talked about women as business people, suggesting they are somehow incompetent, I changed my mind.”

Ten years on, she is not the only one. The controversial policy has now been in place for nearly 10 years and the numbers speak for themselves: in 2003, 7.3 per cent of board members were women; by 2006 that had risen to 21 per cent and today is nearly half. The latest figure for the UK is just 10.9 per cent.

The quota’s fiercest critics have been converted and even those who still remain against it in principle — many of them women — concede the pace of change would not have been so fast without it.

Even David Cameron is interested. At a Nordic summit in February he praised the Norwegian measure and suggested he wouldn’t rule out quotas to get more women onto Britain’s boards. Research quoted by the UK government has shown that strong stock market growth is most likely to occur where there is a higher proportion of women in senior management teams, while companies with more women on their boards were found to outperform their rivals with a 42 per cent higher return in sales, 66 per cent on invested capital and 53 per cent on equity.

However, even in Norway, a country used to gender quotas throughout public life, there were powerful arguments against introducing it. Many felt the state should not interfere with the internal workings of companies, while there were concerns it would hit the value of Norwegian firms, with some even quitting the country.

But the then trade minister Ansgar Gabrielsen was convinced. As a traditional conservative he was an unlikely champion. But he had years of business experience and believed more diversity on boards would mean better performance.

“The law was not about getting equality between the sexes; it was about the fact that diversity is a value in itself, that it creates wealth,” he told his detractors. “From my time in the business world, I saw how board members were picked: they come from the same small circle of people. They go hunting and fishing together, they are buddies. I believe in the opposite. It is important that people think their own, different thoughts, and get to say what is needed, not what is wanted. I wanted to break up the alpha male club.” The business case was key to Gabrielsen winning the argument.

In his luxurious lakeside office Leiv Askvig, the urbane chair of the Oslo stock exchange, admits he was initially against the idea. “My first reaction was that it would be difficult to find enough qualified women. But we had to adapt. Everybody had to do it. Now it is not an issue. You know the people, you know where to look.

“Yes, it was quite unpopular, but from an economic point of view it now seems to me pretty stupid not to make the most of all the talent you have.”

Silvija Seres, 42, a former Microsoft executive who juggles five major board positions with three small children, goes further. “It’s not just about companies being more financially successful, it’s also about survival. They have to dare to be challenged from the inside to adapt quicker. If you try to close your eyes and do business as usual, that’s an extremely dangerous thing. Diversity revives the boards and gives them more of an open-minded atmosphere.”

Tone Bjornov, a 50-year-old financier who sits on the board of investment bank ABG, concurs: “It’s much better to make the economic case than the equality case. It’s not just about being fair. We would all be happier if they didn’t have to impose this by law, but in hindsight it would have taken a hundred years without the quota.”

Marit Hoel agrees it was unhelpful to focus the debate on gender. “This has been a tremendous economic success. Why? Because the whole Scandinavian model relies on the fact that we use women’s productive forces.”

The human capital argument works in Norway. About 80 per cent of women work, childcare is of the highest quality — and affordable — and shared parental leave and flexible working are something British parents can only dream of.

Between them, parents can get 47 weeks leave on full pay — up to £53,400 a year — or 57 weeks on 80 per cent, the cost split between the company and government.

Fathers are entitled to three months, but if the entitlement isn’t used, the family will miss out. There is 90 per cent take-up. This, more than anything, has levelled the playing field between men and women in one fell swoop.

Politicians lead by example. Audun Lysbakken, the Minister for Children, Equality and Gender, recently took four months’ paid parental leave to look after his young daughter. But there are still some women who remain opposed to the idea. “I was against quotas in principle so I was against this law,” says Mai Ibsen, 57, a banker who headed up Citigroup in Norway and now holds several board positions.

“But I was definitely in favour of more women in the boardrooms. Whatever your
opinion, it has had an impressive result because the process has moved forward very quickly.”

She is convinced that all board members are pulling equal weight: “Women can’t be there on sufferance or because someone quota-ed them in. In general they must have both competence and confidence.”

The label “golden skirts”, which was attached to those women who benefited from the quota and hold multiple directorships, is now dismissed by most business people. “If there are any golden skirts then they’re more than matched by golden suits,” says Elin Hurvenes, founder of the Professional Boards Forum, which helps women onto boards.

But even Norway has a long way to go. The trickle-down to senior management level has not yet happened. Just four per cent of the leading executive positions of the top 100 listed Norwegian companies are held by women.

And at first glance, 280 of the 640 companies listed on the Oslo stock exchange have left it since quotas were introduced.

The figures, experts insist, are misleading as 100 small companies which had previously been forced onto the stock exchange went private, while almost 200 more which had begun the listing process rethought as a result of the financial crisis. The focus in Norway has now turned to the 150,000 privately owned enterprises.

Askvig believes the legislation was necessary. “To get that spark, that bang, you had to sort of push people into it,” he says.

Bjornov says there is no going back. “It’s been a bit like the smoking ban. There was lots of debate and people asking how is that going to work, but now we can barely remember it being any different.”

Grieg, a trailblazer who has brought in quotas in her own company even though she is under no legal obligation, has some advice for David Cameron.

“It’s something which has proven to work but it’s important to focus on the economic rather than the gender argument. Then it’s easier to get companies to see it not as something they have to do but as something they want to do. It gives them an added dimension.”

Related Articles

Britain’s smaller employers have finally woken up to the need to boost the number of women bosses, a report reveals today.

While household names in the FTSE 100 have come under intense public and political pressure to appoint more female directors and executives, lower-profile companies have been seen as slower to respond.

However, research from the Quoted Companies Alliance and accountants BDO found that of small and medium-sized companies that had recently hired directors or senior managers, almost a quarter sought female candidates, 38 per cent had had women on their shortlists and almost 30 per cent ended up appointing a woman.

The report said that attitudes were changing in an overwhelmingly “grey, pale and male” sector.

Tim Ward, chief executive of the Alliance, said: “A significant number of companies like to see more women on their candidate longlists and shortlists and that gives me a feeling of confidence that small and medium-sized companies are changing their recruitment process without being told to.”

In February last year, the government-commissioned Davies report called on FTSE 100 companies to have at least 25 per cent women directors by 2015.

Since its publication, the proportion has risen from 12.5 to 16.7 per cent.

However, Linda Jackson, managing director of career management firm 10Eighty, said women still found it harder to network “when they’ve got a day job to do and then have to go home and take over from the nanny”.But the number of women on the boards of even smaller companies is remarkably low, according to corporate data firm BoardWatch.

Of the 1,039 companies on the Stock Exchange’s Alternative Investments Market for younger, growing businesses, 800 or 77 per cent had all-male boards.

The reports come before tonight’s debate, hosted by the Evening Standard, called A Seat at the Top Table, examining why so few women are represented in top boardrooms.

‘Trend has grown over seven years’

Annette Nabavi, a partner at financial advisers AHV Associates, says more women are using their experiences leading small firms to get into the boardroom.

More than a decade ago she became CEO of XchangePoint Holdings, helping to turn it into a fast growing broadband company.

She combines her senior role at AHV’s Mayfair office with running her own company, Anchusa Consulting.

Dr Nabavi, who lives in Sussex, said the last seven years had seen “more women starting, leading and growing small companies”, adding that the increase of role models at this level encouraged women to join boards.

Where have all the women gone?
Join our debate

The Evening Standard tonight hosts a high-level debate examining why so few women are represented in the top boardrooms.

The event will be streamed live here between 6.45pm and 8pm. You can send us your questions now via twitter #womenonboards.

A panel of some the capital’s most successful female high-flyers will discuss why it is still so hard for women to climb to the very summit of their professions, and what needs to change.

The debate, called A Seat at the Top Table is chaired by BBC correspondent Jon Sopel and includes barrister and judge Cherie Booth QC, chief operating officer of the BBC Caroline Thomson and Helena Morrissey, chief executive officer of City fund manager Newton Investment.

It comes against a backdrop of still-slow progress towards greater boardroom diversity.

Not one woman has been appointed to an executive directorship at an FTSE-100 company over the past year.

Note: To view the discussion, scroll forward to 43:20 when the discussion begins. I don’t know why Evening Standard has uploaded a video that shows nothing for 43 minutes.

Related Articles

Companies will face huge fines if they fail to appoint at least 40 per cent women to their boards within eight years, under proposals from Brussels.

Employers with at least 250 staff or a turnover of £40 million will be legally obliged to hit the target by 2020.

The European Union’s Justice Commissioner Viviane Reding said she had decided to pursue legally binding quotas because progress towards greater representation of women in boardrooms had been “very slow”.

Across the 27 EU countries, women hold 13.7 per cent of board posts in major companies and the figure is believed to be much lower in smaller firms. Within FTSE 100 companies, 17.2 per cent of directors are women.

The legislation, which is in draft form, will be strongly resisted by British industry and the Government. A Department for Business spokesman said: “Our position will still stand — we are opposed to legislation for quotas.”

However, under complex majority voting rules Britain might not be able to block the proposal if almost every other EU member supports it.

Companies failing to meet the quota could also be barred from public contracts, be ruled ineligible for EU subsidies or even be forced to rescind appointments of male directors. The final proposals are due to be published by the end of next month.

Within the EU, Finland has the highest proportion of women directors, at 27 per cent. But nine countries, including Italy, Greece and Ireland, are in single figures. Norway, which is not an EU member, has the highest proportion in the world with 42 per cent.

Last year, Ms Reding asked publicly listed EU companies to sign a pledge to increase female representation to 30 per cent by 2015 and 40 per cent by 2020, but only a handful of firms responded.

The draft directive says that at the current rate of progress it will take 40 years to reach 40 per cent in the EU.

But Britain’s 30% Club, a group of FTSE 100 chairmen backing voluntary increases in female board representation, rejected the proposals as “box ticking”.

It said: “The 30% Club believes quotas are not only unnecessary but potentially damaging and actually undermine the very equality the pro-quota lobby seeks. The numbers are lagging the attitude shift — but it is happening and, importantly, it is being driven by business reasons rather than political correctness.”

Jane Scott: Women will rise because of talent not quotas

Getting more women on to corporate boards is now firmly on the agenda for business and government.

The FTSE 100 looks set to meet the Government’s target of 25 per cent of directors being women ahead of the 2015 deadline. Meanwhile the EU is today reported to be preparing rules that will force larger listed companies to ensure that 40 per cent of their non-executive directors are women — not an approach favoured by most UK campaigners, but a sign of the issue’s prominence.

Yet when Elin Hurvenes and I set up the Professional Boards Forum in the UK in 2008, with the aim of increasing the pool of women candidates to sit on boards, we were among pioneers in a wilderness. The dean of the business school where Elin and I met as MBA students said we wouldn’t get any interest from FTSE 100 chairmen. And when the then minister for women and equality convened a group to discuss the issue, the meeting was abandoned after five minutes as something important had come up.

Still, the Forum took off quickly: we’d touched a nerve. At our first event just a few months later one company chairman quipped: “The only time I’ve ever seen so many FTSE 100 chairmen in one place was the last Chelsea Flower Show.”

Last autumn the Prime Minister welcomed us to Downing Street to express his pleasure with the progress following the 2011 Davies Report, which proposed voluntary company targets for women on FTSE boards. We have now had 100 chairmen take part in the Forum and nearly 50 appointments have been made from our alumnae group.

While Government action has been a catalyst for change, chairmen have taken a lead by insisting on being shown a broader talent pool and choosing excellent women directors. There has been pressure from women candidates, companies, corporate governance bodies and the media for progress. Headhunters have a new code of conduct.

This activity has been underpinned in the past two years by Helena Morrissey and the 30% Club, who want the proportion of women on boards to hit 30 per cent by 2015 through voluntary action; they oppose quotas.

Investors have weighed into the debate: the combined force of more than £1.8 trillion-worth of funds under management speaks volumes.

Yet this progress masks a continuing concern about women’s careers. The lion’s share of change has so far come from the appointment of female non-executive directors (NEDs), while there has been negligible movement in the numbers of women who make it to executive director level.

But the rise of women NEDs cannot be dismissed as box-ticking. Sound corporate governance relies on the expertise of hard-working directors. Chairmen and nomination committees take the appointment of NEDs seriously. The bar is high for both men and for women, and rightly so: appointments must be on merit.

The first email I read each morning is my alert for new board appointments. I’m delighted if there is a woman on the list; it makes my day if it is someone we have promoted through the Professional Boards Forum.

Jane Scott is UK director of the Professional Boards Forum. Tonight the Evening Standard hosts a major debate on the issue.